Cloud innovation for the year ahead: From infrastructure to innovation

For years, there has been discussion on when the enterprise-cloud migration tipping point would be reached, and at last it appears it has happened. Cloud adoption is growing quickly around the world, and regional research backs this notion. Organizations like the Cloud Industry Forum, for example, show that cloud adoption in the UK alone has significantly increased, from 48 percent five years ago, to 84 percent today. On the other hand, it’s clear that barriers still remain for many. Research conducted by North Bridge and Wikibon shows that out of nearly 1,000 survey respondents, 45 percent still note security as a top cloud adoption concern, while regulatory/compliance concerns (36 percent), privacy (29 percent) and cloud vendor lock-in (26 percent) also top the list.

We saw several trends accelerate in 2015 which address some of the barriers to adoption – for example, hybrid cloud solidified its place as the de facto model for managing applications and data across on-premises and cloud environments, at least for the foreseeable future. Other trends emerged in response to the unrelenting pace of application innovation driven by the cloud. For example, containerization became a popular way to build and deploy cloud applications more rapidly, and advanced services like machine learning, predictive analytics and the Internet of Things continued to drive business innovation. In short, the pace of the cloud continues to accelerate, and that will remain the case for the foreseeable future.

1) Platform-as-a-Service will take center stage – from infrastructure to innovation

Infrastructure services like compute, storage and networking defined the "first generation" of cloud computing adoption, attracting businesses with their promise of speed and scale without hefty infrastructure costs. But with custom applications serving as a critical aspect of competitive differentiation, these commodity services are not enough to satisfy many businesses, who understand that applications are the next frontier of innovation. As a result, many organizations are increasingly turning to platform services (PaaS) to create and deploy applications more quickly -- taking the focus away from infrastructure plumbing and automating processes that ensure high availability and scalability. Because PaaS requires no infrastructure or software management, time-consuming tasks like patching and troubleshooting are not necessary, and time-to-value is instant, as is auto-scaling to meet business demand. This gives companies the freedom to realize that expertise at deploying and managing hardware and software infrastructure isn't core to their business, and won't give them a competitive edge.

PaaS is nothing new, of course. Azure laid its early roots as a PaaS platform, as we recognized early on that both IaaS and PaaS would blend to maximize cloud benefits of agility and scale. In 2016 though, expect PaaS services across web, mobile, integration and data to proliferate as companies realize that increased speed of innovation is possible through building and deploying applications using these services. The net result is increased engagement with customers, partners and even their own employees, across multiple devices and environments, for maximum competitive advantage. I call this the shift from infrastructure to innovation, and it's underway today.

2) Use of advanced data services will grow exponentially

As a preeminent example of PaaS acceleration, data services are exploding, with IDC estimating through 2020, spending on cloud-based big data technology will grow 4.5x faster than spending for on-premises solutions. Data is growing in size, accessibility and application, making how it is stored, managed and analyzed more important than ever. In 2016, cloud services will continue to proliferate to address these areas, ultimately making it easier for businesses and organization to get insight out of information. This will include the ability to transform data into intelligent action.

Machines will get smarter as adaptive intelligence becomes more prevalent. Machine learning and perceptual intelligence will transform businesses and even whole industries through predictive and automated decision making. A lot of this is possible today, but will become more sophisticated and widely applicable in the year ahead. As part of this, we will see the Internet of Things accelerate as a way to take intelligent action one step further, across connected assets and systems and across verticals like manufacturing and transportation. As a first step, pre-configured IoT PaaS services that allow you to more quickly and easily connect data to physical assets will become more commonplace this year across nearly every industry.

3) Hybrid cloud consistency becomes a reality

A lot of energy is spent by businesses determining their hybrid cloud strategy. This is for good reason, as cloud and on-premises environments can look very different, and those differences cost businesses time and money. Today most hybrid cloud offerings provide are bridges between environments or veneers that attempt to mask their differences, but this doesn’t address what enterprises truly want. If they could wave a magic wand, most businesses are seeking the ability to develop cloud-native applications that work in both environments and have identical management and end-user experiences, across all layers of the cloud stack, from infrastructure building blocks to platform services on top.

In 2016, true consistency between on-premises and public cloud environments will be possible, making it possible for deployment environments to be used in tandem together, rather than as disparate parts. Because Microsoft is in a unique position here of having widely adopted on-premises offerings along with a hyper-scale public cloud, we take this opportunity seriously. For Microsoft, we just announced the next step with Microsoft Azure Stack, a first-of-its-kind hybrid cloud platform product that gives organizations the power of Azure in their own datacenters, and will be placing a lot of emphasis on furthering this offering over the coming year.

4) Increasingly agile development models

Containers topped the business buzzword list in 2015 and with good reason – gaining rapid popularity as a more agile way of building and deploying applications that are portable across multiple environments. Companies like Docker, Mesosphere and many others have made application of Linux containers mainstream and have helped bring Windows into the container ecosystem.

But the agility and portability of containers only takes businesses part of the way there when it comes to developing and managing applications. Monolithic application models can't fully meet the rapid pace and constant change that the cloud dictates - especially software-as-a-service (SaaS) applications. To address this challenge, microservices are fast emerging as a new approach for application infrastructure. With microservices, complex applications are composed of small, independent components that work together to deliver an application’s functionality. Each microservice can be versioned and released independently, in turn enabling a much more efficient, rapid way to update and support the pace of change in the cloud. I believe microservices will become increasingly important this year, as the cloud drives continuous pressure for greater agility. We're already making our innovations in this area available, and you can expect to see more from us here in the coming year.

5) Security becomes a cloud enabler

Security has been a notorious inhibitor to cloud adoption for years. However, I’m sensing a sea change on this issue, with more customers recognizing that the cloud is secure and even acknowledging they believe the cloud is more secure than their own datacenters. While this prediction feels bold, I believe this could be the year we see security change from being an inhibitor, to being a key enabler for cloud adoption. This will be possible as us cloud vendors continue to double down on security across all our products and services and begin delivering more security-as-a-service capabilities, in addition to the existing identity-based security offerings in market already – helping to move security from a barrier to an opportunity in the cloud.

6) Multi-cloud environments become easier to manage

Companies face a wealth of choice these days when it comes to IT environments, both on-premises and in the public cloud. Every application is different, and so is every business scenario. Because of this, many businesses have operations that span a variety of different environments and often, many different clouds. This will undoubtedly continue. However, management becomes increasingly difficult in this multi-cloud world – and frankly there haven’t been a lot of holistic options that enable multi-cloud management with ease.

I expect this will change in 2016, and at the forefront of this will be new technologies and services creating new management capabilities spanning across public cloud platforms and on-premises technologies, operating systems and hypervisors. With lock-in such a pressing concern for many businesses, management can’t be a blocker of choice.

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The above list is top of mind for me, but the cloud is constantly changing as new demands arise every day and innovation continues to change what is possible. My colleague James Staten will be digging further into these trends in the coming weeks, sharing guidance for how you can take advantage of these evolving areas in order to stay ahead. He will also share learnings from many of you about your various cloud journeys. As we want this to be a two-way dialogue, please don’t hesitate to share feedback on what you hope to see from us and from the industry, in the meantime. Best of luck in the coming year.